Legislation that would regulate Hawaii's Kona coffee industry is again brewing up controversy this year.

The state Senate is revisiting a bill today that would approve funding for a study of proposed labeling requirements for locally grown coffee.

The bill, approved last year without funding, would allow the Legislative Reference Bureau to study the effects of a proposed increase in the minimum percentage of local beans required to label coffee under a regional name such as Kona. Current law requires coffee to contain at least 10 percent Kona beans to carry the Kona name.

The measure, Senate Bill 2905, is a positive step toward supporting regional coffees, said Sen. Jill Tokuda, chairwoman of the Agriculture and Hawaiian Affairs Committee and co-sponsor of the bill.

"If we are going to put the money in to do the study, then we can really capitalize on Hawaii, the only coffee-growing region for North America," she said. "This bill is a vehicle for us to take a serious look at our Hawaii regional coffee -- especially Kona -- and look at ways to protect and support the brand."

The bill needs to be acted on by next week, and if approved, will be sent to the Committee on Ways and Means, where a funding allocation would be determined before the bill would be moved to the house.

"The Kona coffee industry is really doing so well," said Jim Wayman, president of the Hawaii Coffee Association and Honolulu's Hawaii Coffee Co., one of the state's largest blenders and maker of the Lions Coffee and Royal Kona Brands. "Typically when some sort of protective legislation is going to be passed it is because that industry or group needs help surviving."

Wayman, who is testifying in support of the bill at today's hearing, said a jump in blending requirements could as much as double the price of a bag of coffee.

The number of Kona coffee farms has increased 36 percent in the past 10 years, he said, with prices paid to farmers increasing an average of 15.4 percent annually.

"I've seen rough estimates that the Kona coffee industry here is worth $120 million," he said. "What $120 million business would double the price of its products without studying it?"

Farm revenues for Hawaii coffee dropped 1 percent to $37 million for the 2006-07 season, after a 45-cent increase to the farm price was more than offset by a 10 percent drop in production to 7.4 million pounds, according to the state Department of Agriculture.

More than a ago, the Hawaii County Council passed a resolution asking the state Legislature to consider laws to change the percentage Kona coffee in a product labeled Kona to 75 percent, modeled after a set of California laws that protect wine regions from confusing labeling.

In November, the council unanimously passed a resolution requesting that the Legislature adopt two bills designed to "stop the consumer fraud, deception and confusion that is now being caused by existing labeling requirements for Kona coffee." Those bills remain in committee in both the House and Senate, and have yet to be heard this year.

Bruce Corker, president of the Kona Coffee Farmers Association, who will also attend today's hearing, said corporate coffee interests have kept meaningful labeling legislation from moving forward. More than 2,300 people have signed an online petition by the group in support of a rule requiring tighter labeling rules.

"There are a couple of very powerful coffee roasting entities in Honolulu that are making tremendous profits by selling commodity coffee at specialty coffee rates by putting Kona on the bag," he said. "That clearly is deceptive."

Five million pounds of 10 percent blended coffee are sold in Hawaii each year, compared with a total production in Kona of 3 to 3.5 million pounds, he said.

The market is "awash with the supply of coffee that people genuinely believe to be Kona, but it's not, and it keeps our prices low," he said. "We are going to lose that specialty coffee status, and prices will drop to commodity prices, so growing coffee will not be viable in Kona."